Recht und Finanzen

Diese Forschungsgruppe untersucht die Bedeutung der Corporate Governance für den Unternehmenswert und die Unternehmenspolitik. Von besonderem Interesse sind dabei die Beziehungen zwischen Unternehmen und Gläubigern bzw. Gläubigerinnen sowie rechtliche Regelungen. Untersucht wird insbesondere, wie finanzielle und rechtliche Innovationen die Beziehung zwischen Firmen und ihren Gläubigern bzw. Gläubigerinnen beeinflussen, sowie die Rolle des Rechtssystems für die Unternehmensentwicklung.

Forschungscluster
Institutionen und soziale Normen

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Juniorprofessor Stefano Colonnello, Ph.D.
Juniorprofessor Stefano Colonnello, Ph.D.
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Referierte Publikationen

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Benchmark on Themselves: CEO-directors’ Influence on the CEO Compensation

Bill Francis Iftekhar Hasan Yun Zhu

in: Managerial Finance, im Erscheinen

Abstract

The purpose of this paper is to examine whether or not the chief executive officers’ (CEO) compensation is affected by the compensation of the outside directors sitting on their board, who are also CEOs of other firms.

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Does It Pay to Get Connected? An Examination of Bank Alliance Network and Bond Spread

Iftekhar Hasan Céline Meslier Amine Tarazi Mingming Zhou

in: Journal of Economics and Business, im Erscheinen

Abstract

This paper examines the effects of bank alliance network on bonds issued by European banks during the period 1990–2009. We construct six measures capturing different dimensions of banks’ network characteristics. In opposition to the results obtained for non-financial firms, our findings indicate that being part of a network does not create value for bank’s bondholders, indicating a dark side effect of strategic alliances in the banking sector. While being part of a network is perceived as a risk-increasing event by market participants, this negative perception is significantly lower for the larger banks, and, to a lesser extent, for the more profitable banks. Moreover, during crisis times, the positive impact on bond spread of a bank’s higher centrality or of a bank’s higher connectedness in the network is stronger, indicating that market participants may fear spillover effects within the network during periods of banks’ heightened financial fragility.

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Lock‐in Effects in Relationship Lending: Evidence from DIP Loans

Iftekhar Hasan Gabriel G. Ramírez Gaiyan Zhang

in: Journal of Money, Credit and Banking, im Erscheinen

Abstract

Do prior lending relationships result in pass‐through savings (lower interest rates) for borrowers, or do they lock in higher costs for borrowers? Theoretical models suggest that when borrowers experience greater information asymmetry, higher switching costs, and limited access to capital markets, they become locked into higher costs from their existing lenders. Firms in Chapter 11 seeking debtor‐in‐possession (DIP) financing often fit this profile. We investigate the presence of lock‐in effects using a sample of 348 DIP loans. We account for endogeneity using the instrument variable (IV) approach and the Heckman selection model and find consistent evidence that prior lending relationship is associated with higher interest costs and the effect is more severe for stronger existing relationships. Our study provides direct evidence that prior lending relationships do create a lock‐in effect under certain circumstances, such as DIP financing.

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The Real Effects of Universal Banking: Does Access to the Public Debt Market Matter?

Stefano Colonnello

in: Journal of Financial Services Research, 2020

Abstract

I analyze the impact of the formation of universal banks on corporate investment by looking at the gradual dismantling of the Glass-Steagall Act’s separation between commercial and investment banking. Using a sample of US firms and their relationship banks, I show that firms curtail debt issuance and investment after positive shocks to the underwriting capacity of their main bank. This result is driven by unrated firms and is strongest immediately after a shock. These findings suggest that universal banks may pay more attention to large firms providing more underwriting opportunities while exacerbating financial constraints of opaque firms, in line with a shift to a banking model based on transactional lending.

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Investor Relations and IPO Performance

Salim Chahine Gonul Colak Iftekhar Hasan Mohamad Mazboudi

in: Review of Accounting Studies, 2020

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Arbeitspapiere

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Benign Neglect of Covenant Violations: Blissful Banking or Ignorant Monitoring?

Stefano Colonnello Michael Koetter Moritz Stieglitz

in: IWH-Diskussionspapiere, im Erscheinen

Abstract

Theoretically, bank‘s loan monitoring activity hinges critically on its capitalisation. To proxy for monitoring intensity, we use changes in borrowers‘ investment following loan covenant violations, when creditors can intervene in the governance of the firm. Exploiting granular bank-firm relationships observed in the syndicated loan market, we document substantial heterogeneity in monitoring across banks and through time. Better capitalised banks are more lenient monitors that intervene less with covenant violators. Importantly, this hands-off approach is associated with improved borrowers‘ performance. Beyond enhancing financial resilience, regulation that requires banks to hold more capital may thus also mitigate the tightening of credit terms when firms experience shocks.

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Firm-level Employment, Labour Market Reforms, and Bank Distress

Moritz Stieglitz Ralph Setzer

in: ECB Working Paper Series, Nr. 2334, 2019

Abstract

We explore the interaction between labour market reforms and financial frictions. Our study combines a new cross-country reform database on labour market reforms with matched firm-bank data for nine euro area countries over the period 1999 to 2013. While we find that labour market reforms are overall effective in increasing employment, restricted access to bank credit can undo up to half of long-term employment gains at the firm-level. Entrepreneurs without sufficient access to credit cannot reap the full benefits of more flexible employment regulation.

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Firm-level Employment, Labour Market Reforms, and Bank Distress

Ralph Setzer Moritz Stieglitz

in: IWH-Diskussionspapiere, Nr. 15, 2019

Abstract

We explore the interaction between labour market reforms and financial frictions. Our study combines a new cross-country reform database on labour market reforms with matched firm-bank data for nine euro area countries over the period 1999 to 2013. While we find that labour market reforms are overall effective in increasing employment, restricted access to bank credit can undo up to half of long-term employment gains at the firm-level. Entrepreneurs without sufficient access to credit cannot reap the full benefits of more flexible employment regulation.

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Effectiveness and (In)Efficiencies of Compensation Regulation: Evidence from the EU Banker Bonus Cap

Stefano Colonnello Michael Koetter Konstantin Wagner

in: IWH-Diskussionspapiere, Nr. 7, 2018

Abstract

We study if the regulation of bank executive compensation has unintended consequences. Based on novel data on CEO and non-CEO executives in EU banking, we show that capping the variable-to-fixed compensation ratio did not induce executives to abandon the industry. Banks indemnified executives sufficiently for the shock to retain them by raising fixed and lowering variable compensation while complying with the cap. At the same time, banks‘ risk-adjusted performance deteriorated due to increased idiosyncratic risk. Collateral damage for the financial system as a whole appears modest though, as average co-movement of banks with the market declined under the cap.

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Internal Governance and Creditor Governance: Evidence from Credit Default Swaps

Stefano Colonnello

in: IWH-Diskussionspapiere, Nr. 6, 2017

Abstract

I study the relation between internal governance and creditor governance. A deterioration in creditor governance may increase the agency costs of debt and managerial opportunism at the expense of shareholders. I exploit the introduction of credit default swaps (CDS) as a negative shock to creditor governance. I provide evidence consistent with shareholders pushing for a substitution effect between internal governance and creditor governance. Following CDS introduction, CDS firms reduce managerial risk-taking incentives relative to other firms. At the same time, after the start of CDS trading, CDS firms increase managerial wealth-performance sensitivity, board independence, and CEO turnover performance-sensitivity relative to other firms.

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